New York City’s ban of short-term rentals versus Amsterdam’s regulation of short stay accommodations

August 26, 2010

Short-term rentals provide tourists and other visitors with a cost-effective alternative to hotels as well as afford them the opportunity to live like a local.

Starting May 2011, tourists will no longer be able to rent short-term accommodations in New York City.

The alleged rationales behind the ban are (1) to increase apartment availability for New Yorkers as well as (2) to protect the health and safety of residents. Assemblyman Gottfried, one of the legislation’s co-sponsors contended: “ it can be a real nightmare when the apartment next door is occupied by one transient after another. You have strangers coming and going at all hours, with noise, disruption, and real safety concerns.”[1] Senator Krueger added that allowing short-term rentals “[…] decreased the City’s tax base”[2] , willfully ignoring that the New York City Hotel Room Occupancy Tax applies to a building or portion of a building if rooms are rented up to short-term guests for more than 14 days during any four consecutive tax quarters or a 12-month filing period. [3]

It is unclear why the New York legislature chose to ban short-term accommodations as opposed to regulating them and elected to forego the sales and other tax revenues collected by short-term rental property and B&B establishment’s owners etc.

Other cities have come up with alternate policy framework for short -stay accommodation.

Amsterdam’s short stay policy

Short-term accommodations (accommodations rented for more than a week and less than six months) in Amsterdam have been regulated since 2009. [4]

The owner who wishes to offer short-term rentals needs to apply for a permit at the local council in the district where the property is located—it is valid for ten years. Furthermore, only rental properties in the deregulated housing market are eligible to apply for a short stay permit. In any one district, a maximum of 5% of the deregulated housing market may be allocated for short stay accommodation, except for the central district where the maximum is 15%. It is important to note that these percentages may be readjusted if the demand exceeds the supply.

The City of Amsterdam effectively balanced the need to protect the regulated housing market with the need to provide short stay accommodations for visitors. Maybe the New Gottfried and Krueger should have taken pointers from the City of Amsterdam when crafting the so-called “illegal hotel bill”?